Last week, the company posted a Q4 operating profit drop of 65 per cent - suffering under the highly competitive US market, as well as high commodity costs and restructuring charges. Hershey has now decided to raise the prices of its most popular domestic chocolate bars. In future, customers now wishing to buy Hershey bars for retail will have to pay a weighted average 13 per cent increase for the company's standard bar, king-size bar, 6 pack and vending lines. These changes result in an approximate three per cent price increase over Hershey's entire domestic product line, and the company says it will use the extra money to offset increases in input costs, including raw materials, fuel, utilities, and transportation. These costs have particularly damaged company profits in the US, and last week President David West said that these "unfavourable conditions" had not improved. "US business is operating in a challenging environment that includes higher input costs, as well as heightened levels of competitive activity," West said. "These factors did not subside in the fourth quarter," he added. While net sales for the quarter ending 31 December 07 amounted to $1.34bn, unchanged from the same period the previous 2006 results, total costs increased 14 per cent to $1.2bn. Margins therefore decreased substantially for the company, falling 7.5 percentage points to four per cent, compared to 11.5 per cent in 2006.